Posted in Operations and Supply Chain Terms, Total Reads: 252
Definition: Purchasing Department
Purchasing Department is a vertical focused on functional activity of buying raw materials, goods and services. It includes supplier identification and selection from where you will be buying the goods, negotiating and contracting, supply market research, supplier measurement and improvement and purchasing system and development.
The purchasing process is of importance because it is used to identify user requirements, effectively and efficiently and evaluate the need ,identify suppliers ,ensure the payment occur promptly and drive continuous improvement.
Objectives of purchasing
1. Support operational requirements - It includes the basic requirements like buy products at right price, from the right source, at right quantity and quality.
2. Supply base management- One of the most important objectives of purchasing function is the selection development maintenance of supply, a process commonly known as Supply base management.
3. Develop strong Relationship with other functional groups
4. Support organization goals and objectives that comply with purchasing management
Responsibilities of purchasing
1. Evaluate and select suppliers
The most important duty of purchasing is to evaluate and right suppliers. It is important to avoid "maverick buying and selling -a situation that occurs when sellers contact and attempt to sell directly to end users
2. Review specifications
The right to question allows purchasing to review specifications where required. The right to question material specifications also helps avoid developing material specifications that only a users favourite supplier can satisfy.
3. Act as the primary contact with suppliers
Purchasing must act as the primary contact with suppliers, but that other function should be able to interact directly with suppliers as needed. involving multiple people enables the communication process between internal customers, purchasing, sale and suppliers internal functions to be more efficient and accurate